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    Shift in The Market Demand For Cinema Ticket

    Uploaded by

    justlinh
    The document contains information about market demand curves for cinema tickets and profit calculations for two countries with different income tax rates. It shows how quantity demanded decreases as price increases for cinema tickets. It also provides revenue, cost, profit and tax calculations for companies in the US and Country M with different income tax rates of 40% and 20% respectively.

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    © All Rights Reserved
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    Shift in The Market Demand For Cinema Ticket

    Uploaded by

    justlinh
    48 views13 pages
    The document contains information about market demand curves for cinema tickets and profit calculations for two countries with different income tax rates. It shows how quantity demanded decreases as price increases for cinema tickets. It also provides revenue, cost, profit and tax calculations for companies in the US and Country M with different income tax rates of 40% and 20% respectively.

    Original Description:

    Corporate Finance exercise

    Original Title

    bai tap

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    © © All Rights Reserved

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    The document contains information about market demand curves for cinema tickets and profit calculations for two countries with different income tax rates. It shows how quantity demanded decreases as price increases for cinema tickets. It also provides revenue, cost, profit and tax calculations for companies in the US and Country M with different income tax rates of 40% and 20% respectively.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    48 views13 pages

    Shift in The Market Demand For Cinema Ticket

    Uploaded by

    justlinh
    The document contains information about market demand curves for cinema tickets and profit calculations for two countries with different income tax rates. It shows how quantity demanded decreases as price increases for cinema tickets. It also provides revenue, cost, profit and tax calculations for companies in the US and Country M with different income tax rates of 40% and 20% respectively.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    You are on page 1of 13

    Maket demand of cinema ticket

    QD Price of ticket
    - $ 50
    10 $ 40
    20 $ 30
    30 $ 20
    40 $ 10
    50 $ -
    QD= -p+ 50
    QD2= -p+40
    QD3= -p+60
    Price of ticket QD2 QD1
    60 - -
    50 - -
    40 0 10
    30 10 20
    20 20 30
    10 30 40
    0 40 50
    20
    30
    40
    50
    60
    70
    P

    Shift in the market demand for cinema ticket
    U.S
    Income tax rate 40%
    Revenue (1000 units) TR TR=Q*P=1000*750 750,000
    Input 500000
    Cost of production TC= 10000*10+1000 11,000
    Gross profit Pr= TR-TC 739,000
    Operating expenses //
    Profit before taxes 739,000
    Income taxes Ci Ci=Pr*40% 295,600
    Profit after taxes 443,400
    Combined result Taxes
    Profit
    Income tax rate 40%
    Revenue (1000 units) TR
    US
    =Q*P=1000*750 750,000
    Cost of production TC
    US
    = 10000*10+1000 11,000
    Profit before taxes Pr
    US
    = TR
    US
    -TC
    US
    739,000
    Income taxes Ci Ci
    US
    =Pr
    US
    *40% 295,600
    Profit after taxes
    For each market
    Tax Combined result
    U.S
    443,400
    -
    10
    20
    0 10 20 30
    QD3
    Price of
    ticket
    0
    10 $ 10 50
    20 40 40
    30 30 30
    40 50 20
    50 10
    60 0
    $-
    $10
    $20
    $30
    $40
    $50
    $60
    - 10 20 30 40
    Series1
    $-
    $10
    $20
    $30
    $40
    $50
    $60
    - 20 40 60
    Q
    Market demand of
    cinema ticket
    QD
    0
    10
    20
    30
    40
    50
    60
    $- $5 $10 $15
    Axis Title
    Shift in the market demand for cinema ticket
    QD2
    QD1
    QD3
    Country M
    20%
    TR=Q*P=500*1000 500,000
    TC= FC+VC= 10000+325 10,325
    489,675
    //
    489,675
    Ci=Pr*20% 97,935
    391,740
    335,140
    835,140
    20%
    TR
    M
    =Q*P=600*1000 600,000
    TC
    M
    = FC+VC= 10000+325 10,325
    Pr
    M=
    TR
    M
    - TC
    M
    589,675
    Ci
    M
    =Pr*20% 117,935
    315,140
    Country M
    471,740
    Axis Title
    40 50 60 70
    Q
    QD3
    #REF!
    #REF!
    #REF!
    Machine A Machine B Machine C
    15,000.00 $ 22,500.00 $ 37,500.00 $
    Cash In Flow Year 1 6,000.00 $ 12,000.00 $ - $ 10,500.00 $
    Cash In Flow Year 2 9,000.00 $ 12,000.00 $ 30,000.00 $ 750.00 $
    =0 at the end of
    Second years years
    = 0 at the time
    1.88 year
    Cash In Flow Year 3 3,000.00 $ 10,500.00 $ 30,000.00 $ 0.25
    = 0 at the time 3.25 year
    Cash In Flow Year 4 - $ 10,500.00 $ 15,000.00 $
    Cash In Flow Year 5 - $ - $ 15,000.00 $
    Depreciation-Old
    Helicopter
    Investment
    depreciation
    Value 350000 60,000 $
    Year 1 20% 70000 13,500 $
    Year 2 32% 112000 13,500 $
    Year 3 19.20% 67200 13,500 $
    Year 4 11.52% 40320 13,500 $
    Year 5 11.52% 40320 6,000 $
    Year 6 5.76% 20160
    42000
    288000
    Depreciation-New Helicopter
    (using the 5-year MACRS schedule)
    1,500.00 $ 125.00 $
    0.88 $
    Year 0 Year 1 Year 2 Year 3
    Value of New helicopter 350,000.00 $
    Depreciation-New
    Helicopter 20% 32% 19.20% 11.52%
    Depreciation-New
    Helicopter
    (using the 5-year MACRS
    schedule) 70,000 $ 112,000 $ 67,200 $ 40,320 $
    Depreciation-Old
    Helicopter 13,500 $ 13,500 $ 13,500 $
    Investment depreciation 70,000 $ 98,500 $ 53,700 $ 26,820 $
    Total Depreciation Tax
    Shield 23,800 $ 33,490 $ 18,258 $ 9,119 $
    Year 0 Year 1 Year 2 Year 3
    Value of New helicopter 350,000.00 $
    Cash from sellling old
    helicopter 68000
    Cash from buying new
    helicopter (350,000) $ (350,000) $ (350,000) $ (350,000) $
    Cash from saving fuel 62,000 $ 62,000 $ 62,000 $
    Year 4 Year 5
    11.52% 5.76%
    40,320 $ 20,160 $
    13,500 $
    26,820 $ 20,160 $
    9,119 $ 6,854 $
    Year 4 Year 5
    (350,000) $ (350,000) $
    62,000 $ 62,000 $
    Probability Cash Flow
    0.15 60,000 9,000
    0.25 85,000 21,250
    0.45 110,000 49,500
    0.15 130,000 19,500
    Total Expect cash flow 99,250
    Out Comes Probability of Outcome Assumption
    5,250 $ 25% pessimistic
    7,800 $ 45% moderarely successful
    13,500 $ 30% optimistic
    0 1 2 3 4 5 6 7 8
    Free cash flow -625000 99,250 99,250 99,250 99,250 99,250 99,250 99,250 99,250
    Project cost of capital 10%
    Discount factor 1 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467
    PV of Free cash flow -625000 90227 82025 74568 67789 61626 56024 50931 46301
    Salvage value 50000
    NPV 34848
    Year
    9 10
    99,250 99,250
    0.424 0.386
    42092 38265
    Year
    Probabilit
    y
    Cash
    flow
    R1
    Probabilit
    y
    Cash
    flow
    R2
    3.33% 400 13.33 5% 300 15
    90.00% 500 450.00 5% 500 25
    6.67% 700 46.67 90% 700 630
    510 670
    0.25 500 125 0.3 300 90
    0.5 600 300 0.5 500 250
    0.25 700 175 0.2 700 140
    600 480
    Expected Value
    Year 0 Year 1 Year 2
    -1,000
    R
    k = 0.07
    61.83946196
    -20.00174688

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